[Red envelope] Late March forecast: unilateral downtrend, with methods to counter it, prioritizing key direction before market rally…

1. Key Stock Highlights: [Taoguba]

1. Storage: Demingli identified a main upward wave signal on March 4th. The first quarter performance leads the trend, currently in a consolidation phase within the main upward stage. The primary upward trend has not been broken, so it remains important to pay attention to and monitor.

2. PCB: Shenghong will remain valid as long as it does not fall back to the low point before the Spring Festival. The bottom-up structure is still intact, so it is still worth paying attention to and monitoring.

3. New Energy: Hunan Yunneng, CATL, Sunshine Power, and other new energy sectors have already begun to rise from the bottom ahead of the market. The new energy sector continues to be worth paying attention to and monitoring.

4. Optical Modules: Zhongji Xuchuang and Xinyi Sheng rose from the bottom ahead of the market, still worth paying attention to and monitoring.

2. Market Index Overview:

1. Review of previous predictions:

As shown in the above screenshot, there was an early forecast before the Spring Festival. From January to mid-March, the main structure was a high-level sideways consolidation. In mid-March, beware of the risk of the spring sideways breakout, which could trigger a phase adjustment.

This forecast was once again confirmed by the market this week as we entered mid-March!

2. Future major structure forecast:

Continuing from the pre-Spring Festival analysis, from January to mid-March, the market will be in a high-level sideways consolidation. Starting mid-March, a breakdown and adjustment phase will begin, lasting until late March or early April, followed by a main upward wave in a bull market in April.

For smaller structures, next week will focus on repair. After repair, the market may still adjust, so caution is advised against chasing gains.

Overall, in late March, expect adjustments. But looking back in April, these will be seen as golden opportunities. Therefore, late March should be used to improve stock selection skills and actively prepare for the Q2 bull market, rather than panic selling. Even if there is a sharp correction in late March, like in April and May 2025, it will be viewed as a bottom area in hindsight.

3. Response Strategy:

Currently, the market is in a structural slow bull phase, so not all sectors and stocks will move in sync with the index. For example, before the Spring Festival, optical module Xuchuang experienced continuous adjustments, while CPO Tianfu led a main upward wave. Recently, while other sectors have been consolidating, storage stocks have surged in a main upward wave.

Similarly, in the past half month, the Shanghai Composite Index has been consolidating, while the ChiNext Index has been bottoming out and rising. This is characteristic of a structural bull market.

Thus, a structural bull market involves different sectors and directions rotating and leading at different times.

Although the Shanghai Index may consolidate until late March or early April, some sectors and sectors will complete their bottoms and start rising earlier. These are the opportunities and directions we should focus on next week.

In the past two weeks, sectors like storage, new energy, optical modules, and ChiNext have shown signs of leading the market, forming different structures from the Shanghai Index and trending upward. Pay attention to signals and opportunities from these sectors that have already bottomed out ahead of the index.

Regarding the market rhythm, I believe our forecast remains valid.

For example, some say the short-term rhythm was misjudged on Friday, but the market did not turn around that day because the Shanghai Index continued to fall sharply.

However, the market showed signs of reversal, such as Ningde and Sunshine Power, which experienced trend reversals on Friday.

This can be explained simply: the Shanghai Index is in a unidirectional downtrend, so even if Friday was predicted as a reversal day, the overall trend kept weakening. After morning repair, the index was sold off again in the afternoon. Conversely, some sectors like ChiNext, which had already bottomed out, did not follow the same downtrend and were more likely to reverse successfully on repair days.

Do you understand this logic? It’s like, on a recovery day, although the overall market sentiment is positive, some weak stocks may fail to recover and continue to decline, while slightly stronger stocks can rebound and even make new highs.

The same applies to the upcoming rhythm: during recovery days, ChiNext may show stronger repair, while the Shanghai Index may repair more weakly or even fail to recover.

In summary, keep an eye on ChiNext. The overall market may see a rebound and then a correction next week.

In the next one or two weeks, opportunities and risks will coexist. Risks come from the Shanghai Index’s potential continued decline, while opportunities include the golden bottom in 2026 and sectors that have already bottomed and started a main upward trend ahead of the market.

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